World Grain - April 2011 - 42

FEATURE: MERCOSUR INFLUENCE CONTINUES TO GROW

porter of barley and is generally characterized as the “natural supplier of the MERCOSUR” for this product. Argentina, which exported 505,452 tonnes of barley in 2010, has beneﬁted by the increasing demand from Brazil. Because the MERCOSUR is a net exporter of soybeans and soybean oil, there is little local demand for these products within the region. The augmented demand for these products from countries such as China, as well as the demand originated from the biofuels industry, has caused an increase in export markets for this crop. In Argentina, this process has also been boosted by the export restrictions set for corn and wheat. While Brazil and Argentina are the leading soybean producers in the MERCOSUR, Paraguay has made progress in soybean production. According to the latest data published by the Paraguayan Chamber of Exporters and Commercializers of Cereals and Oleaginous (CAPECO), with an increase of only 6.1% in the cultivated area, Paraguay produced 7.3 million tonnes of soybeans in 2010 after harvesting only 3.6 million tonnes in 2009. Of that 7.3 million tonnes, Paraguay exported about 5.6 million tonnes of soybeans last year.

The MERCOSUR region is also becoming a strong corn exporter. The National Association of Cereal Exporters (ANEC) of Brazil estimated that corn exports could grow in the 2010-11 campaign up to 11 million tonnes, a 40% increase over the previous crop. The Brazilian corn harvest is expected to reach 51.3 million tonnes in 2011 due to favorable climatic conditions and in spite of a 9% drop in the cultivated area. In addition, through a strong increase in yields, the Argentine corn harvest went from 12 million tonnes in 2008-09 to over 22 million tonnes in the last campaign. Uruguay produces over 500,000 tonnes of corn a year, but only for the domestic market. EXPORT RESTRICTIONS IN ARGENTINA Although Argentina consumes about 6.5 million tonnes of wheat and 8 million tonnes of corn a year, not all the surplus is exported. Since 2006, the local government has restricted exports in order to assure domestic supply. So far, 5 million tonnes of corn and 7 million tonnes of wheat have been authorized for exports in the 2010-11 campaign. According to Victoria Jauregui, a corn expert from Cargill Argentina, “the Argentine Cereals Exporters Cen-

ter divides that amount among trades, according to each exporter’s market share from the last three years. According to this distribution, the National Ofﬁce of Agropecuary Commercial Control grants the export permits required to sell the corn to foreign markets.” In addition, wheat pays in Argentina 23% of export taxes while corn exports pay 20%. It is the only country in the MERCOSUR to apply these fees and restrictions to grain exports. With the leading wheat producer in the MERCOSUR limiting exports, the region could lose market share. A recent report on South American Wheat, released by Cargill during the last International Association of Operative Millers Middle East and Africa District Conference, showed that this continent “will continue to become a smaller player in the world export market pie.” The report also noted that the 2010-11 export wheat availability for destinations outside the region is diminishing fast.
Cristina Kroll is a freelance writer based in Buenos Aires, Argentina. She can be reached at: ckroll@infovia.com.ar
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